(1)M1If at any time—
(a)the interest on a loan ceases to be relevant loan interest; or
(b)a person making payments of relevant loan interest ceases to be a qualifying borrower;
the borrower shall give notice of the fact to the lender.
(2)Without prejudice to subsection (3) below, in relation to a payment of interest—
(a)which is due after the time referred to in subsection (1) above and before the date on which notice is given under that subsection, and
[F1(aa)as respects which any of the conditions mentioned in section 374(1) is fulfilled, and]
(b)from which a deduction was made as mentioned in section 369(1),
section 369 shall have effect as if the payment were a payment of relevant loan interest made by a qualifying borrower.
(3)Nothing in subsection (2) above [F2shall be taken as regards the borrower as entitling him to any deduction or to retain any amount deducted and, accordingly, where any amount that has been deducted exceeds the amount which ought to have been deducted], he shall be liable to make good the excess and an inspector may make such assessments as may in his judgment be required for recovering the excess.
[F3(4)The Management Act shall apply to an assessment under subsection (3) above [F4as if it were an assessment to income tax for the year of assessment in which the deduction was made].
(4A)If there is any unreasonable delay in the giving of a notice under subsection (1) above, the borrower shall be liable to a penalty not exceeding so much of the aggregate amount that he is liable to make good under subsection (3) above as is attributable to that delay.]
(5)M2If, as a result of receiving a notice under subsection (1) above or otherwise, a qualifying lender has reason to believe that any interest is no longer relevant loan interest or that a borrower is no longer a qualifying borrower, the lender shall furnish the Board with such information as is in his possession with respect to those matters.
(6)M3Where it appears to the Board that any of the provisions of sections 370 to 373 is not or may not be fulfilled with respect to any interest, or that a qualifying borrower has or may have ceased to be a qualifying borrower, they shall give notice of that fact to the lender and the borrower specifying the description of relevant loan interest concerned or, as the case may be, that the borrower has or may have ceased to be a qualifying borrower.
(7)Section 369 shall not apply to any payment of relevant loan interest of a description to which a notice under subsection (6) above relates and which becomes due or is made after such date as may be specified in the notice and before such date as may be specified in a further notice given by the Board to the lender and the borrower.
(8)M4In any case where—
(a)section 369 applies to any relevant loan interest by virtue of a notice under section 374(1)(b), and
(b)the relevant date specified in the notice is earlier than the date from which the interest begins to be paid under deduction of tax, and
(c)a payment of that interest was made on or after the relevant date but not under deduction of tax,
regulations may provide for a sum to be paid by the Board of an amount equal to that which the borrower would have been able to deduct from that payment by virtue of section 369 if it had been made after the relevant date.
[F5(8A)In any case where an amount to which a person is not entitled is paid to him by the Board in pursuance of regulations made by virtue of subsection (8) above, regulations may—
(a)provide for an officer of the Board to make such assessments as may in his judgment be required for recovering that amount from that person; and
(b)make provision corresponding to that made by subsection (4A) above and subsections (4) and (5) of section 374A.]
[F6(8B)Subsections (1), (5) and (6) above shall not apply where interest ceases to be relevant loan interest by virtue of section 38 of the Finance Act 1999.]
(9)F7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10)F7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Textual Amendments
F1S. 375(2)(aa) inserted (with application in accordance with s. 112(5) of the amending Act) by Finance Act 1995 (c. 4), s. 112(2)
F2Words in s. 375(3) substituted (with effect in accordance with s. 81(6) of the amending Act) by Finance Act 1994 (c. 9), Sch. 9 para. 11
F3S. 375(4)(4A) substituted for s. 375(4) (with application in accordance with s. 112(5) of the amending Act) by Finance Act 1995 (c. 4), s. 112(3)
F4Words in s. 375(4) substituted (with effect in accordance with Sch. 18 para. 17(1) of the amending Act) by Finance Act 1996 (c. 8), Sch. 18 para. 8
F5S. 375(8A) inserted (with application in accordance with s. 112(5) of the amending Act) by Finance Act 1995 (c. 4), s. 112(4)
F6S. 375(8B) inserted (with effect in accordance with Sch. 4 para. 18(5) of the amending Act) by Finance Act 1999 (c. 16), Sch. 4 para. 9(1)
F7S. 375(9)(10) repealed (with effect in accordance with Sch. 4 para. 18(1) of the repealing Act) by Finance Act 1999 (c. 16), Sch. 4 para. 9(2), Sch. 20 Pt. 3(7), Note 1
Marginal Citations
M1Source-1982 Sch.7 8
M2Source-1982 Sch.7 9(1)
M3Source-1982 Sch.7 10(1), (2)
M4Source-1982 Sch.7 11